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Privacy and Policy Terms and Conditions Advertising Inquiries. Best MT4 Broker with lowest cost. ZERO swap fees on gold. This is our entry trigger. Now all confluences are aligned nicely, Now it is a matter of placing the trade. We can place a sell order here. But where we place stops and targets. According to the above chart, we placed stop-loss a few pips above the lower high, And we used 2R for the target which means our take-profit is twice as the stop-loss.

Beside the stop-loss and take profit, we have to manage the trade, right? This is simple. Learn more on How to Cut Losses in Forex. Have a look at the two examples that we executed in the last month before move into the next trading strategy. Support and resistance are one of the highly rated and most profitable trading tools when it comes to anticipating market movements. Almost every trading strategies out there use some sort of support and resistance. Another fact about support and resistance is that they tend to works better on higher time frames especially in the daily chart.

Which mean price has to be test support or resistance in the near past. Have look at the 4-Hour gold chart below. According to the above chart, you can see that there is a level comes from the daily chart which acts as a resistance in past. But on the 4-hour we can see that price again bounce from that daily resistance level and this confirms this resistance is valid and can look for trades in future. Just like that before looking for any trades we have to confirm the validity of the support and resistance.

So what are the confirmations that we can use to find the price movement around support or resistance? Have a look at the marked bullish engulfing candlestick pattern in the above chart. Why this candle is important for us? There are two reasons, one is Bullish engulfing pattern indicate buying pressure and the second one is it occurred at daily support level which is a higher probability area to look for trade opportunities.

With all these confluences in mind, we place stop-loss few pips below the bullish engulfing pattern and we use 2R for the take profit. Just like that, you can also use the pin bar as your entry technique. Have a look at the chart below,. Read our Ultimate Guide to the RSI indicator to learn more about the RSI Indicator.

Before that keep in mind RSI over-bought and over-sold is not trading signals, But if you can combining RSI over-bought and over-sold with price actions, then you can have a small edge over the market.

Have a look at the chart below, first, you can see that price fell after the RSI overbought signal and the same thing happened again after the RSI over-sold signal — price move higher. Now the question is how to catch these movements?

The breakout strategy comes very handily in this kind of scenarios. Why we wait for a breakout? By waiting for the breakout we can increase the probability of our trade. According to the above chart first, we wait for RSI over-bought signal then we wait for local structure level to be broken to the downside. Now all we have to do is place our orders, right? As the above chart showed we placed sell orders after the breakout and placed stop-loss few pips above the moving average.

We are going to use the histogram of the MACD to measure changes in momentum. A word about the settings, there are no best settings for a Forex strategy or any other market. Like I said, this trading system is going to use Fibonacci retracements on the daily chart and we will use. This means we are only looking to take shorts on the daily chart for our trading strategy.

Those are shown with the red dashed lines and a red box envelopes both the Fib and the structure level. The left side was cut off but this is actually a resistance level off to the left that was broken and when price broke back under it, it is once again holding up price. The green circle on the price shows the other level that was previous support. We are using the histogram of the MACD to show us momentum. If you were to use a cross of the MACD and signal line, moves are long over.

For a short trade, we want to see a rising MACD as price heads towards the confluence zone we mapped out. Keep in mind this: We have a trade setup once price reaches the confluence zone. Once price reaches that level, we want to see the MACD histogram tick downwards indicating the bulls are weakening at this level. The huge benefit of using a trading strategy on the daily chart is we are in no rush to do our analysis. In this example, since we are looking to short, we have this in our favor:.

You could also wait for a reversal candlestick pattern but if this is what you choose you may want to follow the following plan:. The reason to drop down a time frame is because the daily chart will hide reversals that appear intra-day.

This part is simple.

Here is the truth : most traders hate to trade in larger timeframes because it is slow , it has fewer trading opportunities and it requires a ton of patience but knowing how to trade daily timeframe in the forex market will increase chances of being a success as a forex trader. But most new traders are attracted to lower timeframe because they think they can make a lot of money in lower timeframes because of high volatility trading activities happening in the lower timeframe.

There is another group of trader, who trades in the daily timeframes with their busy lifestyles. Traders who trade daily timeframes are more calmly, they can make good decisions because time is on their side. On the other hand, however, there are another group of traders, who trade on the smaller timeframe with the goal of earning lots of money in the period of 24 hours Day.

Most of the time these traders have to face lots of losing trades and ended up wondering where it all went wrong. Okay as you probably guessed, we are going to talk about the daily timeframe but also we are going talk about how to forecast price movement in the daily timeframe in a reliable way. If you are struggling as a trader, by switching to daily timeframe can drastically increase your chances of being a success as a trader.

Also, business like this where probabilities matter everywhere, increasing your chances should be your top priority. By the time you finish reading this post, you will know why I prefer daily timeframe rather than the lower timeframe. Just like anything, the trading daily frame also comes with advantages and also with some of the disadvantages. High trading frequency is the main factor that lots of traders, especially new traders shift their trading activities to the lower timeframes.

I can agree that lower timeframe is providing a good amount of trade opportunities each day, But are they all quality trade setup? No, right. Anyone who has experience in both lower timeframe and higher timeframe will tell you that daily timeframe is the king when it comes to quality.

There are people who trade daily timeframe profitably with a few hundred dollar trading accounts. But comparing to the lower timeframe your trading capital is more secure in the daily timeframe.

This is because in daily you only take quality trades. But in the lower timeframe, however, you are trading all over the place without understanding what is the bigger picture is. Calculating your stop loss distance from the perspective of PIPs only tells me a part of a story.

Actually, the distance between stop-loss and take-profit is irrelevant. The only thing that matter is how much you reward compared to the risk or else Risk to Reward Ratio. Of course, as long as you can trade micro-lots, you can definitely risk pips to make pips.

According to the above example, we risk pips to make pips. Although we had pips wider stop, our reward is four times bigger than risk. That is what the casinos are for. If your goal is to become a profitable forex trader — try to accept the fact that Real trading is boring and slow and that is a good thing. Okay, so far we discussed why daily timeframe is playing major roled especially when it come factors like Quality and Reliability. Predicting price movement in the Daily timeframe is more accurate compared to the lower timeframe.

This is because lower timeframe is very choppy — It includes choppy movement of news events and lots of hard to read price movements. In the Daily timeframe, however, price actions are more clear, because It filtered out all choppy movement comes in the lower timeframes. Also, price actions in daily timeframe have more value than lower timeframes. This is because a Daily candle reflect whole trading activities in a given day or in another word a daily candle reflect all trading activities happening in Asia, London, New York sessions.

To understand where the market is heading you need to place support and resistance in your forex chart. The only thing we can see is bullish and bearish price movements.

But the chart with support and resistance, however, we can clearly see that price is at the level of daily support yellow circle. Okay, by simply placing correct support and resistance we can find out where is the market and where it is likely to heading. As a forex trader, we need more confluence to buy at support levels. Okay, now you know where is the market and what are the possibilities for future price movement. By observing candle size at the support and resistance levels will give you clues about how buyer and seller behave at the support or resistance.

If you spot candle are getting smaller and smaller when it getting closer to support level, It basically saying sellers are losing their control over the market at the support and at the same time there are buyers who are willing to buy at the support.

This is the same chart that we used above. Have a look at the yellow circle. Did you notice anything? The yellow circle shows candles are getting smaller and smaller when it comes to the support level. Green zone which is a great indication that saying sellers are losing momentum at the support and at the same time buyers are buying at the support. Have a look at the chart below. Did you spot any Price action trade setup? If yes, pat on your back.

Look at the indecision candles at the support. What are they saying? Indecision between buyers and seller. Simple is that. What happened after the indecision? A Big Bullish Engulfing candle saying that buyers are stepped in into the market at the level of support which is a good indication to say that price is going to bounce from this support level and it went up like a rocker.

See these are simple prediction made by utilizing support, candle strength and price. This is why your trading methodology should be simple. If you like these types of analysis make sure to follow us on Instagram. In forex trading, The simplicity is the most overlooked aspect to profiting long-term. As a forex trader make sure to keep all the aspects of your forex trading simple — from the way you think and the way you place the trades. Now try to go through all forex pairs and apply the concept we learned here.

Make sure to do it in the Daily timeframe. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. We Are… Trade Revenue Pro. We specialize in reverse trading. More Over Our Trading Technique Enable Everyone, Even Novice Forex Traders to Recognize and Ride the Trend Reversals with Higher Risk to Reward Ratio. Trade Article. How to effectively Trade Daily Timeframe in Forex.

But… There is another group of trader, who trades in the daily timeframes with their busy lifestyles. Advantages and Disadvantages of the Daily Timeframe Just like anything, the trading daily frame also comes with advantages and also with some of the disadvantages.

easy analysis. enjoyed reading patiently and found it informative. will give me more time to analyse trade. Leave a Reply Cancel reply Your email address will not be published. About Us. Recent Posts. Buying Bitcoins Without KYS — Is It Possible? Read More ». pionex bot trading Read More ». Intraday Reversal Trading Strategy — How to Catch Big Reversals Read More ». Recent Trade Ideas. Why Do Most Day Traders Fail? A Calm and Profitable End to the First Month of Read More ».

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According to the above chart, we placed stop-loss a few pips above the lower high, And we used 2R for the target which means our take-profit is twice as the stop-loss. Just like that before looking for any trades we have to confirm the validity of the support and resistance. This is what I do on the weekends to check the last weekly and daily candlesticks. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. About Us. It takes 24 hours for each of the candlesticks to form. When the candlestick closes on the daily chart, you know traders are holding positions over night either long or short depending on their conviction.

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